There’s no underestimating the importance of homeowner’s insurance, but there’s also no denying its often high cost. With average annual premiums over $900, it can be a significant part of a household budget.
The good news is that there is a variety of strategies you can use to lower your homeowner’s insurance cost. Here’s a look at five of those strategies:
Focus on Security
Enhancing your home security is a good way to lower your insurance premiums, and there are many things you can do yourself to make it happen:
Install smoke and carbon monoxide detectors
The bottom line is that smoke detectors reduce the chances of you or a family member dying in a house fire by up to 50 percent, while most insurance companies offer a premium discount of 5 percent if you have them in your house and keep them in working order. Meanwhile, a carbon monoxide detector may reduce your premium by around 3 percent.
Keep fire extinguishers handy
While many people keep a fire extinguisher near the kitchen – and with good reason – it’s wise to have one extinguisher on each floor of your home.
Deadbolt locks & burglar alarms
Another relatively easy DIY project is installing deadbolt locks as a deterrent to criminals. Burglar alarms and motion-sensor lighting also help beef up your home security – and having a good security system will reduce insurance premiums.
Hazard detection sensors
Hazard detection sensors are similar to smoke detectors and placed near furnaces and plumbing fixtures to alert you if something is wrong. For example, a battery-operated sensor will signal you if a furnace shuts down (and before pipes freeze). Or, the sensor will alert you if a pipe develops a leak.
Remove trees close to the home
Trees look great and provide shade, but a severe windstorm or heavy snowfall can cause them to fall and cause significant damage. You’ll probably want to hire a professional service to make sure the tree is taken down safely.
Bundle insurance policies
You can save money by combining your auto, life, and homeowner’s insurance policies with the same company. Another way to lower your premium is by opting for a higher deductible, particularly if you can afford to pay less-expensive claims out of your pocket. Covering minor claims on your own will save you money in the long run.
Install storm shutters and doors
This is an important strategy you can employ if you live in areas that are prone to hurricanes and other major storms. Adding storm shutters and reinforced doors will protect your home and are looked at favorably by insurance providers.
Another step you can take if you live in hurricane territory is to add water barriers (via sealing your roof deck), reinforcing your roof, floors, and walls, and installing a hurricane-rated garage door. While your initial cost for these reinforcements may be high, it’s a long-term investment that can lower your insurance costs.
Know your policy
Make sure you know and understand all of your policy’s riders, terms and conditions, and exclusions. For instance, homeowner’s insurance does not cover flooding so it’s important to get a flood insurance policy to cover against damages that may run in the thousands of dollars.
The bottom line is that there are many things you can do yourself to help lower your homeowner’s insurance premiums – whether it’s beefing up your home security system, knowing the ins and outs of your policy, or taking care of potential hazards outside the home such as trees.